Vienna-based oil and gas company OMV has entered into an agreement with Uniper to acquire 24.99% stake in Yuzhno Russkoye gas field in Western Siberia for $1.85bn.

Located in Yamal-Nenets region, the Yuzhno Russkoye field is one of the largest gas fields in Russia, with a current plateau production of 25 billion cubic meters per year.

The Nord Stream pipeline, which supplies Germany directly with Russian gas, uses Yuzhno Russkoye gas field as its key resource.

The acquisition is expected to be completed by the end of this year.

OMV chief executive officer Rainer Seele said: “The acquisition will build a new core area, Russia, in our upstream portfolio adding 100,000 boe/d to OMV’s production.

“After closing, OMV will produce in total more than 400,000 boe/d. This transaction is fully compliant with the execution of our strategy and significantly reduces OMV’s production cost.”

The transaction is subject to further conditions, including co-shareholder consent as well as merger control and foreign investment control clearance in Russia. 

According to OMV, the capital expenditure needs of the field are expected to amount to $20m annually until license expiry.

The license for the field will expire by the end of 2043.

OMV upstream board member Johann Pleininger said: “An important strategic rationale behind this transaction is the ability to replenish reserves.

“With remaining recoverable reserves of around 580 mn boe (OMV share), Yuzhno Russkoye becomes a major source of reserve replenishment in OMV’s portfolio.”

Separately, OMV has signed an agreement to sell its wholly owned subsidiary OMV Petrol Ofisi to VIP Turkey Enerji for €1.36bn.

Image: Yuzhno Russkoye gas field (Russia). Photo courtesy of OMV Aktiengesellschaft.